Sumitomo and Bhushan Steel Limited deepen ties

Sumitomo Metal Industries Limited and Bhushan Steel Limited have signed a MoU regarding Sumitomo Metals' participation in the Bhushan Steel Limited’s Orissa integrated steel project, which is currently under execution.

Sumitomo Metals has provided technical assistance to Bhushan Steel Limited and supplied it with steel sheets since 1997. The alliance announced that it intends to deepen this relationship and give further impetus to Sumitomo Metals' strategy to grow its steel sheet business.

Specific details of the alliance are as follows
1. Sumitomo Metals will provide Bhushan Steel Limited with technical assistance for the construction and operation of the integrated steel works Bhushan Steel Limited is building at Orissa in India.
2. Sumitomo Metals will also provide Bhushan Steel Limited with technical assistance for the production of steel sheets for automobiles.
3. Sumitomo Metals will be the exclusive provider of this technical assistance.

Bhushan Steel Limited is building an integrated steel works that will include a blast furnace, steelmaking facilities and a hot strip mill. When it is completed in 2008, its initial capacity is expected to be 2.2 million tonnes per year.

India becomes 5th largest crude steel producer in the world

India’ steel ministry announced that “Led by robust domestic demand the steel sector in India has been witnessing extraordinary growth, making India the 5th largest crude steel producer in the world as against 8th position held 3 years back.”

It added that “Production of finished carbon has increased from 35.41 million tonnes in 2002-03 to 49.58 million tonnes in 2006 -07. During April to October 2007, production of finished carbon is estimated to be about 29.37 million tonnes and is expected to be 55.5 million tonnes in 2008.”

While exports have remained fairly stable between 2002 and 2003 until last year at around 4.5 million tonnes, imports have increased from 1.51 million tonnes in 2002-03 to 4.10 million tonnes maintaining a rising trend this year, largely to fill the demand supply gap in the domestic market.

The demand for steel is expected to remain buoyant, above 10% over the next 5 years and in the most likely scenario the steel production capacity in India is expected to touch 124 million tonnes by 2012. While the Brownfield expansion plan over the next 5 years is expected to add 40.5 million tonnes capacity to the existing capacity of 56.84 million tonnes, the most likely scenario for addition to capacity by setting up of Greenfield projects is expected to be 28.72 million tonnes taking the total capacity to 124.06 million tonnes.

As per a steel ministry release “Taking into consideration the intentions expressed by various steel investors including multinationals, domestic steel majors and FDI, the likely capacity achievable by 2019-20 will be around 275 million tonnes.”

Cost pressures may push Indian steel makers to hike prices

It is likely that India’s integrated steel producers would increase domestic prices of both flat and long products in January 2008 to pass on part of the increased costs of raw materials like iron ore and coking coal etc.

The quantum of price hike is not known but looking at the global market situation, it could be in the range of INR 500 to INR 1500 for various products with flat products taking the major brunt. As most of them decide the monthly pricing policy, a decision is expected by the month end followed by announcements in early January.

An increase in prices will impact a wide range of industries, from automobiles to white goods. Automobile companies have already announced that they would be increasing the sticker price on passenger cars from January 2008 due to rising input costs.

Though the government does not usually interfere in such price revisions, union steel ministry constituted a committee earlier this year under a joint secretary with industry members to monitor the price situation.

India ready to join OECD Steel Committee

It is reported that India is ready to join the OECD's Steel Committee provided that no additional conditions are imposed over and above the obligations under the World Trade Organization.

Mr RS Pandey steel secretary said that "We have received an invitation to join Organization for Economic Cooperation and Development Steel Committee. We are ready provided no conditions are imposed over and above the obligations under the WTO. Once they agree to this we have no problem in joining the Committee."

Mr Pandey said that "Though currently we have observer status in the Committee, but in view of our massive-capacity expansion plans we are slated to be the world's second biggest steel producing nation in next few years. So that is why OECD wants us to be a part of this committee. We are surging towards achieving a steel production of 124 million tonnes by 2011-12 and even if we achieve 90% capacity utilization it will be 110 million tonnes."

Mr Risaburo Nezu chairman of OECD Steel Committee said that "Indian production continued to increase rapidly this year, driven by strong demand." He added that consumption in India is also growing at a double digit pace, though it is at a much lower level of around 45 million tonnes.

He said that "Crude steel production is on track to grow by around 98 million tonnes or by 8% in 2007 to reach a level of around 1,330 million tonnes. Weaker growth in North America and the EU is being offset by rapid production expansions in emerging economies." He added that the EU is registering a slowdown in production growth this year as imports account for an increasing share of domestic demand. Solid growth is still being observed in Germany, while output levels have either stagnated or fallen in Italy and France.

With its 30 members and observers including India, China and Russia the committee accounts for around 65% of world steel production and 80% of global steel exports. China, which has also been invited to join the Committee, is considering the same, while Russia is understood to be willing to join the Committee.

India’s core industries growth dips to 4.5% in October 2007

The index of 6 core infrastructure industries having a combined weight of 26.7% in the Index of Industrial Production with base 1993-94 stood at 237.9 (provisional) in October 2007 and registered a growth of 4.5% (provisional) as compared to a growth of 9.9 % in October 2006.

During April to October 2007, 6 core infrastructure industries registered a growth of 6.2% (provisional) as against 8.9% during April to October 2006.

The movement of IPP and growth rates since 2005-06 are as under

AISF joins anti POSCO movement

SNS reported All India Student Federation has staged a demonstration in front of POSCO India’s corporate office protesting against the proposed 12 million tonnes per annum capacity steel mill near port town of Paradip in Orissa.

As per report, some hundred students sat on a dharna on the main road leading to the office for an hour throwing vehicular movement to a standstill. They were shouting anti POSCO slogans and showed placards and banners.

A protester said that “Industry and development means more employment generation and social security. But by putting up this mega industry, not many people will be absorbed in the factory. Then what is the point in having such industry?”

Mukand terminates coke purchase MoU

Mukand Limited announced that it has terminated a MoU signed for purchase of coke after it found, during the due diligence, that it is not in the interest of the company.

Mukund’s release said that "To reduce its dependence on procurement of coke from the market and to cut costs, it had, on October 10th 2007, signed a MoU with a party to purchase its coke manufacturing facilities in the state of Maharashtra with a capacity to produce 120,000 tonne per annum of metallurgical coke from coking coal."

The release added that “The MoU inter alia provided that the purchase was subject to due diligence to be carried out by Mukund Limited. After due diligence, it was found that aforesaid purchase was not in the interest of the Company to proceed further in the matter. Accordingly, said MoU has been terminated on November 28th 2007.

Mukund added that “It has acquired land near its plant at Ginigera in Karnataka to set up its own coke manufacturing facilities and hence there will be no financial impact on costs due to aforesaid termination of MoU.”

Vikash Metal to set up steel plant at Begusarai

Projects Today reported that Kolkata based Vikash Metal & Power plans to set up an integrated steel unit in Begusarai district of Bihar with an investment of IBR 1,500 crore. Work on the project is likely to commence by April 2008 and scheduled for completion within 16 months.

The Greenfield steel plant will be built over 300 acres and will produce 56,000 tonnes per annum steel, 80,000 tonnes per annum steel billets, and 150,00 tonnes per annum of rolled steel. The steel mill will be supported by a 125 MW coal based power plant.

HEC successfully mechanizes 180 tonne ladle crane for NINL

Ranchi Express reported that Heavy Engineering Corporation has moved one step forward towards attaining the number 1 position in crane manufacturing segment by successfully mechanizing 180 tonnes ladle crane for Orissa based Nilanchal Ispat Nigam Limited.

A brief function was organized in Heavy Engineering Corporation's SFW shop of building plant to mark the achievement. It has been manufactured on schedule and would be finally supplied to the NINL by the end of December 2007.

Mr GK Pillai CMD of Heavy Engineering Corporation said that it aspires to be the number 1 in crane manufacturing in India. Congratulating the workers for successfully manufacturing the crane in record time, Mr Pillai said that it has received orders from Steel Authority of India Limited’s Bokaro Steel Plant and Bhilai Steel Plant to manufacture more than 50 such cranes.

8 workers injured in limestone mine firing incident in MP

BS reported that at least 8 laborers were injured in a firing incident at a limestone mine in Sagmania in Madhya Pradesh.

Police said that the injured laborers were admitted in the district hospital and two rounds of empty cartridge shells have been recovered from the mine. So far, no arrests have been made in this regard.

Police said that the laborers, who were protesting the sacking of over 50 mine workers, pelted stones and ransacked the firm’s office.

The cement factory management, with which the mine is associated, has imposed a ban on the recruitment of new laborers employed by the contractor and led to the dispute between union leader Mr Kanhaiya Singh and the contractor’s men. When the situation went out of control, both the sides opened fire injuring 8 laborers.

Update on JSW aluminum project in AP

It is reported that JSW Aluminum Limited had received a letter of approval for the proposed alumina refinery at Boddavara village in Vizianagaram district in Andhra Pradesh from the union ministry of forests and environment.

The report cited Mr R Ch Swain project head of JSW Aluminum as saying that “I understand they will have to get the forest and environmental clearance for bauxite mining. A public hearing will have to be conducted prior to the environmental clearance. There is no doubt that we have to address environmental concerns expressed by these groups. But it must also be understood that technologies are now available to undertake bauxite mining without ruining the environment. There is also no room for the apprehensions that it will adversely affect the livelihood of tribals.”

He said that “The land acquisition for the project is going on. We have got all the clearances. For the project 867 acres of assigned land, 150 acres of government land and around 100 acres of private land has to be acquired. We have prepared one of the best packages for the displaced families. So far, we have taken possession of 310 acres of assigned land and we have to acquire the rest. We have to negotiate with owners of private land.” He added that the greater Visakha municipal corporation had agreed to supply the water required for the project.

Mr Swain further said that “We are in the process of appointing an engineering consultant and in a few weeks’ time that may be completed. Indian Railways has given the traffic clearance after completing the feasibility study. The alignment has been fixed. The Visakhapatnam port authorities have also agreed to allot a captive berth for our operations.” He added that the Andhra Pradesh Mineral Development Corporation would look after that aspect and supply the bauxite.

Indian Railway posts 11% surge in earnings growth in 9 months

Indian Railways has generated revenue of INR 29416.42 crore from freight traffic during April to November 2007 period up by 10.99% YoY as compared to INR 26502.79 crore during April to November 2006 period.

Indian Railways carried 501.38 million tonnes of freight traffic during April to November 2007 period up by 7.97% YoY as compared to 464.39 million tonnes carried during April to November 2006 period. The net tonne kilometers recorded at 321460 million up by 5.44% YoY from 304871 million.

The results for four commodities accounting for almost 75% is as under

Earning in INR crore

The performance is attributed to higher volumes as well as imposition of some surcharges and levies like busy season and congestion etc.

L&T board approved transfer of RMC business unit

Larsen & Toubro Limited announced that, its board of directors at its meeting held on December 22nd 2007, has approved transfer or disposal off of the ready mix concrete business unit of the company to a subsidiary company or to any other entity subject to shareholders approval through postal ballot.

Indian Railway’s manufacturing units exceed targets in 8 months

It is reported that Indian Railway’s infrastructure manufacturing units, except Integral Coach Factory, have exceeded their respective targets during April to November 2007 period.

The production update for the month of November 2007 is as under

Indian energy sector needs INR 480,000 crore in next 5 years - CII

According to a report called ‘India Energy Inc – Emerging Opportunities & Challenges’, jointly released by the Confederation of Indian Industry and KPMG, India’s power and upstream energy sectors need investments of around INR 480,000 crore to INR 600,000 crore in the next 5 years.

The report emphasizes the need for strong private sector participation to complement public sector and to bring in the required capabilities and technologies.

According to the report, the Indian energy sector is attracting investment in diverse streams, which is driven by a surging economy and the resulting demand supply gap in the short run and by the need to achieve sustainability and self sufficiency in the long run.

Videocon to invest INR 25,000 crore in power business

It is reported that Indian consumer electronic goods maker Videocon Industries is planning to generate 5,000 MW power at an estimated cost of INR 25,000 crore and is scouting for land in Gujarat, West Bengal and Chhattisgarh for the purpose.

Videocon recently signed MoU with West Bengal and Chhattisgarh to set up power projects in the states. It is believed to be on a look out for a global partner for the power generation business.

Officials of Videocon said that "We are yet to start the land identification process. Once the land is identified, the company will prepare feasibility reports." They added that the projects would be financed in the debt equity ratio of 70:30.

Videocon officials said that "Videocon Industries through its SPV Pipavav Energy Pvt Limited has decided to set up 2x800 MW imported coal based super critical thermal power project near Pipavav port in Gujarat." They added that the cost of this project is expected to be around INR 8,000 crore depending on several factors such as availability of fuel.

Mr JN Das appointed as new director of SCI

Shipping Corporation of India Limited has announced that Mr JN Das has been appointed as its new director liner & passenger services by the union ministry of shipping, road transport & highways and has taken over charge with effect from December 24th 2007.

ADB to provide USD 1.85 billion aid to NE States

Projects Today reported that Asian Development Bank is likely to allocate a total of around USD 1.85 billion for the northeastern states for a period of 3 years. The cities to be covered under this program are Agartala, Aizawl, Shillong, Kohima and Gangtok.

According to the business plan, the ADB will provide USD 550 million to the northeastern region during 2009 for programs like North East States Integrated Food Control and River Erosion Mitigation Project, Assam energy efficiency enhancement project.

For 2010, the ADB approved about USD 650 million for funding projects which include North East Region Urban Development Investment Program and North East National Highway Investment Program.

ADB has earmarked USD 250 million aids for development of cities in the region. In addition, during 2008 the bank will provide USD 100 million for Assam Governance and Public Resource Management and USD 300 million for roads development program. Under the Assam Governance Program, the agency will provide funds to the state government to help it increase revenue and improve fiscal performance, whereas under the Northeastern Region Capital Cities Development Investment Program, the agency will provide funds to improve the quality of urban living conditions and enhance urban productivity.

Hot band spot prices moving towards record levels

SteelBenchmarker reported that the US hot rolled band spot price for December 14th 2007 surged by 2.5% to USD 621 per ton on FOB basis after 4 consecutive rises, world export HRB price rise by 2.2% to USD 601 per tonne FOB the port of export for the second consecutive time, Chinese HRB ex works price down by 0.8% to USD 525 per tonne for the third consecutive time and the Western European HRB up by 1.6% to USD 686 per tonne ex works, after slipping last time.

USA
USD 621 per ton FOB the mill
Up by USD 15 per ton from USD 606 two weeks ago
Up by USD 61 per ton from the recent low of USD 560 on August 13th 2007
Down by USD 9 per ton from the recent high of USD 630 on April 9th 2007

China
USD 525 per tonne ex works
Down by USD 4 per tonne from USD 529 two weeks ago
Up by USD 55 per tonne from the recent low of USD 470 on October 22nd 2007
Up by USD 38 per ton from the previous high of USD 487 on September 10th 2007

Western Europe
USD 686 per tonne ex works
Up by USD 11 per tonne from USD 675 two weeks ago
Up by USD 23 per tonne from the recent low of USD 663 on July 23rd 2007
Down by USD 10 per tonne from the recent high of USD 696 on June 11th 2007

World Export Price
USD 601 per tonne FOB the port of export
Up by USD 13 per tonne versus USD 588 two weeks ago
Up by USD 51 per tonne from the recent low of USD 550 on July 23rd 2007
Up by USD 5 per tonne from the recent high of USD 596 on March 26th2007

SteelBenchmarker publishes steel benchmark prices for HRB, CR coil, rebar, and standard plate in the US, Western Europe, mainland China, and the world export market every fortnight.

Japanese steel majors to expand Robe River iron ore JV

Mitsui & Co Ltd, Nippon Steel Corporation and Sumitomo Metal Industries Ltd announced that they decided to develop Mesa A Warramboo mine, which is jointly operated with Rio Tinto group in the Pilbara region of Western Australia.

Total high grade reserves across the Mesa A Warramboo deposits are estimated at approximately 250 million tonnes. The mine will have a full scale capacity of 25 million tonnes annually and will start production in 2010. It will sustain production of Robe Valley ore at 32 million tonnes annually, with a total mine life of 11 years. A 49 kilometer rail extension will connect the new mine to the existing rail network.

The project capital cost is estimated at approximately USD 900 million, which will be funded on pro rata basis among JV participants
1. Rio Tinto - 53%
2.Mitsui - 33%
3. Nippon Steel - 10.5%
4. Sumitomo Metals - 3.5%

Robe River JV was established in 1970and commenced shipment of iron ore from Robe River in 1972. Rio Tinto participated in JV in 2000 after TOB of North. It commenced shipment of iron ore from West Angelas in 2002. 2. Actual production of iron ore of Robe River JV is as under

In million tonnes

BHPB bid for Rio - Rio chairman hits back at BHP offer

It is reported that Rio Tinto Ltd has hit back at BHP Billiton's hostile approach, playing up its independent growth prospects amid renewed speculation of a Chinese backed counter bid.

Mr Paul Skinner chairman of Rio in an open letter to shareholders repeated his board's belief that BHP Billiton's three for one share offer significantly undervalued Rio Tinto and its prospects.

Mr Skinner reminded shareholders of Rio's growth plans for iron ore and copper mining and for aluminum production. Mr Skinner said that "Together these are positioned to capture strong growth in demand in the developing economies, including China and India.”

Moody forecast stable outlook for US steel industry

Moody's Investors Service said that the outlook for the US steel industry remains stable, with strong demand and pricing.

Ms Carol Cowan analyst in a note to investors said that "Strong overall global demand has supported pricing in every region throughout 2007, with China again providing tremendous support for global steel consumption. Demand in the US has also remained solid, despite weakness in the appliance and automotive markets, largely driven by high levels of commercial construction activity."

Ms Cowan added that the housing market is not a significant driver for steel consumption, but ongoing weakness in that sector could undercut demand across some end markets.

She said that "Further deterioration in the overall US economic environment could cause slowing demand during the course of 2008. In particular, Moody's anticipates weakness in steel destined for the appliance, automotive and residential construction markets.”

Ms Cowan noted Moody's upgraded more steel companies worldwide in 2007 than in previous years 16 through the end of November compared with four in 2006. The analyst wrote that "The highest number of upgrades occurred in the US, with seven upgrades affecting six companies. Much of the driving force behind the upgrades has been the material improvement in margin performance, debt protection metrics and credit profiles, a result of the very strong underlying conditions in the steel industry over the last four years."

Moody's expects global consolidation will benefit the industry in the long run. But Ms Cowan thinks steel companies will show production discipline and financial health through a stretch of weak demand and pricing before they see sustained positive ratings momentum.

Wire rod prices in US surge by 19% in December 2007

It is reported that steel wire rod prices in North America increases to USD 593 per tonne in December 2007 up by 19% YoY. As per reports, US’s wire rod makers have proposed further price hike to USD 620 per tonne.

Market insiders suggest the immediate pricing outlook is clouded by overall weak demand for the product used to feed screw machines that make bolts, nuts, rivets, yokes and various mechanical parts. Rod also is used to make steel wire reinforcing products, sold primarily to manufacturers of concrete products used in non residential construction. And the outlook for nonresidential construction also remains uncertain.

Market analysts comment wire rod price USD 620 per tonne won’t be implemented unless demand improves dramatically.

Analysts at Global Insight forecast that the wintertime peak will be under USD 610 a ton, sliding back to the USD 580 to USD 560 range as the weather improves.

Apollo Minerals acquires stake in Mt Oscar

Apollo Minerals Limited announced that it has completed its acquisition of an 80% stake in the Mt Oscar Iron Ore project in Western Australia, with the backing of a Chinese partner. Apollo said it will commence an aggressive exploration program on the tenements by March 2008.

Perth based Apollo, which listed in October this year, said it completed the acquisition ahead of schedule following the signing of a joint venture agreement with the Chinese steel group. Apollo said that “The signing of the MoU with the strategic Chinese partner is a significant boost to its iron ore acquisition strategy. It is a step by Apollo towards becoming a significant iron ore company.”

Under the terms of the transaction, Chinese partner has the option to subscribe to up to USD 3.3 million in Apollo shares at 34 cents per share, to take an interest over 15% in Apollo, subject to relevant approvals. Apollo said the Chinese group would immediately acquire 2.94 million shares in Apollo or 4% for USD 1 million.

As well, under the MoU, the Chinese group has indicated its intention to take a 19.9% minimum interest in Apollo and has the ability to negotiate an agreement to market iron ore produced from the project.

PNA Group buys Precision Flamecutting & Steel

PNA Group Inc announced that has bought Houston based Precision Flamecutting & Steel LP.

Precision is engaged in the processing and distribution of carbon, alloy, and HSLA steel plate, including plasma cutting, flame cutting and beveling services, as well as machining, rolling, forming, heat treating, coating, and general machining and fabrication services.

Mr Jacob Kotzubei a Partner at Platinum Equity, the owner of PNA Group, said "This is another great addition to the PNA Group that perfectly fits our acquisition strategy of finding extremely well-run metals service center operations that focus on delivering excellent customer service.”

Mr Buffett buys stake in Marmon Holding

It is reported that Mr Warren Buffett’s Berkshire Hathaway has announced purchase of 60% of Marmon Group Holding for USD 4.5 billion.

Marmon Group is a business owned by the Pritzkers for more than half a century. Its biggest unit, Union Tank Car, makes liquid carrying rail cars and was part of the Standard Oil Trust split up by the government in 1911. Its most recognizable unit is the Hyatt hotel chain, which the family founded and still controls. In 2006, Marmon posted revenue of USD 7 billion and profit of USD 1 billion from operations like wire and cable, railroad tank cars and water treatment systems.

Marmon Keystone service center chain operations at Butler in Pennsylvania. Marmon Keystone is a distributor of carbon steel, stainless steel, aluminum and nickel alloy tubular products; chrome and stainless bar and stainless steel fasteners.

SDI’s new structural mill to start in May

Purchasing.com reported that the new medium structural steel mill at the Steel Dynamics plant in Columbia City in Indian state of US will start operations in May instead of January because of late delivery of equipment.

The new mill will have the capability of rolling some of the lighter-weight beams now being made at SDI's existing sections and rail mill as well some new light structural steels.

Mr Keith Busse CEO of SDI said that SDI managers expect continued strength in structural steels from continued North American investment in infrastructure, in institutional, industrial and distribution buildings, and energy projects.”

He however acknowledged that “There are risks related to possible further deterioration in the US economy and to specific steel consuming sectors, but we believe the steel markets should strengthen in 2008 even without significant improvement in the U.S. economy.”

Japan raises tinplate export prices to Asia

It is reported that Japan’s export price of tinplate to other Asia countries will rise by USD 30 per tonne in the first quarter of 2008.

The report added that Japanese mills have finished the price negotiation with China, Thailand and Malaysia's tinplate producers. The negotiation in the next first quarter will switch to three-month contract, when it was usually six month.

It is expected that the tinplate demand in China may increase by about 10% from 2.4 million tonnes to 2.7 million tonnes and the demand in South East Asia countries may also increase.

Açotubo eying export opportunities

BNamericas reported that Brazilian steel tube distributor Açotubo is open to new opportunities to export its products, although the company's focus is on sales at home.

Mr José Carlos Palopoli marketing manager of Açotubo told BNamericas that "We have the right conditions to export to any part of the world, but if I were to prioritize a region I would say Latin America.”

Mr Palopoli reiterated Açotubo's plans to see steel and steel tube shipments this year surpass 75,000 tonnes. By comparison, sales of both products reached 58,000 tonnes in 2006.

Meanwhile, the company is upbeat on demand for the coming year and eyes new sales in Brazil. Mr Palopoli said "We believe there's still a lot to conquer here and we believe 2008 will be very good.”

Privately owned Açotubo, founded in 1974, describes itself as the largest distributor of steel and steel tubes in Latin America.

WCI Steel amends its credit agreement with Harbinger Capital

WCI Steel Inc announced that the company had entered into an agreement to modify its existing USD 150 million credit facility with Harbinger Capital Partners Master Fund I Ltd, replacing the current bank group.

With this amendment, certain advance limitations under the agreement will be waived until July 31st 2008, and the company will be able to fully utilize its current USD 150 million facility in the near term. The initial borrowing under the facility will carry an interest rate of LIBOR plus 5%. The interest rate on each borrowing in excess of collateral valuations equals 15% and subsequent to March 31st 2008, the interest rate on each advance in excess of collateral valuations increases at the rate of 0.2% each week.

Mr Leonard M Anthony president & CEO of WCI Steel said that "We appreciate the support of our largest shareholder to improve the financial position of WCI Steel. This amendment provides the company with substantial additional liquidity and the necessary flexibility as we return to full operations after the November fire at the blast furnace hydraulic control rooms and rebuild our working capital."

Mr Anthony added that "We are also pleased to report that the new walking beam furnace in the hot strip mill is operational. Although we still have challenges ahead of us, I am confident that with the increased liquidity, the support of Harbinger and working together with our customers, suppliers and employees, we can successfully implement solutions to the challenges facing WCI Steel. With the assistance provided by the amended financing, we will be able to ensure a brighter future for WCI Steel."

Samsung bags USD 2.4 billion order for three rigs

It is reported that South Korea's Samsung Heavy Industries secured three separate deals worth USD 2.41 billion for new build deepwater rigs.

Samsung Heavy Industries in a statement said that the first deal valued at USD 1.15 billion is for two new build semi submersible rigs to be delivered to an unidentified Russian client. The contract will cover the construction of the topsides for the two rigs each valued at USD 550 million, with deliveries scheduled for second quarter and third quarter of 2010. Once complete, the semi submersibles will be capable of operating in up to 350 meters of water.

It added that the other two deals are repeat orders for new build drill ships worth around USD 630 million to be delivered by May 2011. Singapore-based Tanker Pacific has contracted Samsung to build a drill ship to be delivered to an African client. The second drill ship is for an undisclosed North American client. Both rigs will be capable of drilling up to 30,000 feet in 10,000 feet of water.

Vestas wins 70 MW wind turbine orders in Spain

Reuters reported that Denmark's Vestas, the world's biggest maker of wind turbines has won two orders totaling 70 MW for projects in Spain.

One order is for 26 units of its V90-2.0 MW turbine and the other for 10 units of its V90-1.8 MW turbine.

Delivery will start in December 2008.

Venalum to produce 437,000 tonnes of aluminum in 2007

BNamericas reported that Venezuelan state company Venalum expects production to ring in at 437,000 tonnes of aluminum this year.

An executive at the Venalum told BNamericas that the company expects to produce more than 438,000 tonnes again in 2008.

Venalum produced 438,927 tonnes of aluminum in 2006, exceeding installed capacity of 430,000 tonne per year for the fifth consecutive year.

Venalum is 80% owned by state heavy industry holding CVG and the remaining 20% belongs to a group of Japanese companies. The plant is located in Puerto Ordaz in southeastern Bolívar state.

Saudi investments in UAE construction sector reach AED 29 billion

Khaleej Times reported that investments by Saudi Arabian companies in the UAE construction industry have reached AED 29.4 billion in 2007.

Strategic Marketing & Exhibitions, the organizer of a property show to be held in 2008, in a statement said that the creation of laws protecting investors has been the driving force behind this growth. It also noted that existing rules are being modified for the benefit of buyers.

The report cited Mr Saleh Al Sorayani chairman of Snasco as saying that "The tremendous growth that we have achieved through our most recent development project mirrors the attractiveness of the UAE real estate landscape to Saudi investors, who want to establish long term investments."

Strategic Marketing & Exhibitions is organizing International Property Show 2008, which would have many participants from Saudi Arabia including Snasco. Set on February 17th to 19th 2008 at the Dubai International Convention and Exhibition Centre, the exhibition will showcase the latest developments in the Middle East's construction industry and facilitate property purchases. The show will attract buyers and investors, regional and international exhibitors, property developers, financiers, designers, real estate agents and consultants. Last year's event attracted over 18,000 visitors from 70 countries and facilitated multibillion-dirham worth of deals.

Mr Dawood Al Shezawi MD of Strategic Marketing said that the increasing presence of Saudi based participants means that the show has become an established platform in tapping into the booming UAE construction sector.

L&T bags Muscat Golf Course contract

Larsen & Toubro Limited has announced that its Omani subsidiary Larsen & Toubro (Oman) LLC has added 1 more feather to its cap by securing the prestigious project of Muscat Golf Course valued at OMR 42.5 million.

The order is for township development encompassing construction of the following
1) 80 numbers of luxury villas
2) 25 number of 3 storied apartments
3) Related building services
4) High Voltage & Low Voltage Installations
5) External services
6) Roads & culverts
7) Perimeter fencing

The promoters of the project are Muscat Golf Course Project LLC. The project completion period is 21 months and the consultants for the project are Cowi & Partners LLC and cost consultants will be Majan Engineering Consultants.

Larsen & Toubro (Oman) LLC is a JV of India’s Larsen & Toubro Limited and The Zubair Corporation, which is one of the leading business group in the Sultanate of Oman. It has been operating in Oman since 14 years and making its presence felt in the construction industry of Oman with every passing day.

Pakistan plans to boost auto parts exports

Khaleej Times reported that Pakistan’s caretaker government has planned to boost the export of auto parts industry and a detailed study will be conducted to identify issues in the auto parts industry and as soon as the study was completed.

The study also sought to address issues concerning quality development, standards, domestic and international market potential, the employment potential, and a mechanism for successfully tapping the full potential of the country's auto parts industry.

The auto parts industry is USD 125 billion market dominated largely by the industrialized countries. The share of Pakistan in the total exports is only USD 25 million and auto parts consumption in local production is only 12% of total sales. The auto parts vendors are also showing steady growth and becoming one of the most dynamic sectors in Pakistan's manufacturing. The industry has generated 110,000 jobs and exported USD 25.03 million thus saving foreign exchange of PKR 23 billion.

As the production of automotive is increasing in Pakistan, the auto parts vendor industry is also expanding. The components produced in Pakistan range between 55% and 70% of total completely Knocked down kit. The policy of localization, helping this sector to also generate more jobs is needed to be effectively pursued.

Pakistan government was informed by its planners that the automotive industry has potential for growth and employment because of its greater backward and forward linkages. The global exports of auto sector are over USD 600 billion while Pakistan's share is approximately USD 50 million. The domestic market is expanding with rising income levels and auto financing facility extended by banks. Since 2000-01, there has been a rising trend in the capacity utilization and the industry at present is operating at full capacity. The sector employs about 300,000 workers and that is expected to rise sharply due to a positive outlook of the industry.

Similarly, the motorcycle industry is growing steadily. It has greater linkages with the vendor industry that shows its potential for growth. This sector contributes USD 200 million in GDP and provides employment to more than 100,000 workers.

Engro Energy inks loan agreement for 217 MW power plant

Daily Times reported that Engro Chemical Pakistan Limited’s 100% subsidiary Engro Energy Private Limited has signed a USD 154 million financing agreement with a consortium of foreign institutions for its 217 MW power plant being constructed near Qadirpur in Sindh Province.

The consortium comprises of leading international foreign financial institutions including IFC, DEG, Proparco, FMO, Swedfund International and OPEC Fund for International Development. This is the first ever Pakistani private sector power project being funded by Swedfund and Proparco, while the German development finance institution DEG is actively supporting projects in Pakistan as an international finance partner since last 2 years after resuming its activities in Pakistan.

The project will generate electricity by consuming low quality permeate gas from Qadirpur gas field, which is being flared currently also resulting in reduced carbon emissions. The plant will be based on highly efficient technology being provided by China National Construction & Engineering Company resulting in lower cost of power generation.

Nabucco pipeline project impossible without Iran – Mr Nozari

Mr Gholamhossein Nozari oil minister of Iran has assured that it would not be possible to put Turkey’s Nabucco gas pipeline into operation without Iran. He added that “If Nabucco pipeline comes on stream, Iran will be the sole option for supplying its gas as it is the world’s 2nd largest holder of natural gas.”

Mr Mohammadreza Ne’matzadeh MD of National Iranian Oil Refining & Distribution Company had already announced that Europe had no way out but to satisfy its energy needs by transferring Iran’s gas via Turkey’s Nabucco pipeline.

Mr Ne’matzadeh said that “Europe’s need in Iran’s gas supplies through Nabucco pipeline which passes through Turkey is inevitable. European countries needed Iran’s gas while Iran was in need of the EU market. That’s why the new Nabucco pipeline which was proposed by Turkey for transferring gas supplies of Central Asia and Iran to Europe was welcomed by the energy ministers of Austria, Hungary, Romania, Bulgaria and Turkey itself. Energy ministers in a recent meeting have each taken up a 20% share for the establishment of the pipeline.”

Turkey and Iran are expected soon to complete the agreement to build some 3,500 kilometers of gas pipelines to transport up to 40 billion cubic meters of gas annually to Europe through Turkey.

Nabucco pipeline aims to reduce Europe’s dependency on gas from Russia, which has proved to be an unreliable energy supplier in recent years. European Union is lagging behind in implementing the project and has not made headway yet. A reason is that Europe has not found a proper alternative for Russian gas. It seems Nabucco project cannot be economically viable unless it transfers Iran’s gas to energy hungry European countries via Turkey’s gas could be transferred via the pipeline by 2017.

Iran cement consumption soars in past 3 years - Report

Mehr News Agency quoted Mr Ali Akbar Mehrabian Iran’s industries and mines minister as saying that Iran’s cement consumption has considerably increased during the past 3 years.

Mr Mehrabian said that Iran witnessed an about 27% rise in cement production in November 2007. He added that scores of cement plants are ready to go on stream, predicting that domestic cement output will reach 55 million tonnes by the next 6 months.

Kuwait energy firm to invest in Pakistani oil sector

Mr Ahsan Ullah Khan caretaker minister for petroleum of Pakistan said that the government is providing a level playing field to investors in oil and gas sector.

Mr Khan, during a meeting with Mr Hussain Al Shama CEO of Bakri Energy Management System of Kuwait, has discussed investment potential in the Pakistani oil sector. During the meeting, Mr Khan briefed Mr Shama about the steps being taken by Pakistan government to promote the petroleum sector in order to meet the growing energy requirement of the country. He said that Pakistan government has deregulated the downstream petroleum sector in 2001 that attracted unprecedented investment in the country as well as provided competitive environment.

Mr Shama appreciated the growth of petroleum sector in Pakistan during the last few years and investor friendly policies being pursued by government of Pakistan. He said that the Bakri Energy would take full advantage of investment potential in Pakistan’s petroleum sector for mutual benefit.

Al Zubarah receives finishing touch at Singapore

Gulf Drilling International's jackup Al Zubarah is undergoing equipment installation and testing at Keppel FELS shipyard in Singapore. Keppel FELS is expecting to hold a naming ceremony for the jackup in late January 2008 and the rig is scheduled for delivery in February 2008 and to be dry towed to Qatar in March 2008.

The delivery of Al Zubarah will mark the completion of Keppel's second new build jackup for Gulf Drilling. The first new build jackup Al Khor delivered to Gulf Drilling earlier this year, is now drilling offshore Qatar. The two KFELS B class rigs are suitable for operations in the Arabian Gulf and Indian waters.

JB Group to build a skyscraper in Dubai by March 2008

It is reported that JB Group all set to develop a 60 storey skyscraper called the JB Tower in Downtown Burj Dubai.

Mr Jatin Chutke VP of JB Group said that "The JB Tower is our debut property project in the Middle East spearheading two other major developments, including a 4 star hotel and on Shaikh Zayed Road, the Twin Towers."

The JB Tower, a commercial block scheduled to break ground in March 2008, is the flagship in a USD 1.6 billion property venture in the Middle East by the JB Group. Designed in the shape of the JB Group logo, the tower will be located at one of the Gulf region's major urban developments, opposite the Dubai Mall and near to the Burj Dubai tower.

BNA to set up new HDG line to tap demand from auto sector

It is reported that the three parent companies of Baosteel Nippon Steel & Arcelor Automotive Steel Sheets Co Ltd have agreed to build a new No 3 hot dip galvanizing line at a site adjoining the existing facilities at an investment of JPY 25 billion. The new production facility is aimed at meeting the high demand from China's fast growing automotive sector.

The new line is a state of the art hot dip galvanizing line modeled on the existing No 1 hot dip galvanizing line, with a production capacity of 450,000 tonne per year of high grade automotive galvanized steel sheet. The new line is expected to start operations in 2010.

Baosteel Nippon Steel & Arcelor Automotive Steel Sheets Co Ltd is a JV of Baoshan Iron & Steel Corporation, Nippon Steel Corporation and ArcelorMittal. It manufacture and sells cold rolled steel sheets and hot dip galvanized steel sheets mainly for automobiles and partly for home appliances and structural sectors.

BNA’s facilities include
1. Continuous descaling and cold rolling mill of 1.7 million tonnes
2. Continuous annealing and processing line of 0.9 million tonnes
3. No 1 hot dip galvanizing line of 450,000 tonnes
4. No 2 hot dip galvanizing line 350,000 tonne

Mr Xu reappointed as chairman of Baoshan Iron & Steel Co

It is reported that Mr Xu Lejiang chairman of Baosteel Group Corp has been again elected as chairman of the its listed unit, to fill a power vacuum after his predecessor Mr Ai Baojun was appointed as a vice mayor of Shanghai.

Mr Xu was approved as a director on the board of Shanghai listed Baoshan Iron & Steel Co at a shareholder meeting and was later elected as chairman by the board.

Mr Ai took the chairman post of Baoshan Steel in April this year from Mr Xu. Mr Ai had held senior posts at Baosteel as well as at the listed arm since 1998. He joined the company in 1994.

Mr Xu became Baosteel's chairman early this year after Ms Xie Qihua, the renowned Iron Lady retired. Mr Xu earlier became Baoshan Steel's chairman in May 2006, also replacing Ms Xie.

China reduces 44 million tonnes of obsolete iron & steel capacity

Chinese National Development & Reform Commission announced that China has eliminated 29.4 million tonnes of outdated iron smelting capacity and 15.21 million tonnes of outdated steel smelting capacity by the end of November 2007.

Mr Ma Kai NDRC minister, at a national iron and steel industry conference, said that "Eliminating backward iron and steel production capacities will help China realize its environmental protection and energy saving goals and facilitate the industry's restructuring."

After the state council, the NDRC signed obligation contracts of cutting iron and steel smelting capacity with 10 provinces, autonomous regions and municipalities, included Beijing, Hebei, Shanxi, Henan, Jiangsu, Shandong, Zhejiang, Jiangxi and Xinjiang, where the country's outdated iron and steel production capacities were mostly concentrated. This involved 344 iron and steel makers. 4 provinces namely Zhejiang, Jiangxi, Henan and Shandong, had fulfilled their targets by November 2007.

Shanxi, which shouldered the heaviest task of iron production capacity reduction in the first batch of 10 provincial level regions, had completed 90% of its 10 million tonne quota.

NDRC signed the second batch of obligation contracts with 18 provinces, autonomous regions and municipalities on December 27th 2007 to eliminate 49.31 million tonnes of outdated iron smelting capacity and 36.1 million tonnes of outdated steel smelting capacity. This involved 573 enterprises and included Baosteel.

China decided to reduce energy consumption per unit of gross domestic product by 20% by 2010 and to build the country into energy efficient and environmentally friendly society. However, energy consumption per unit of GDP fell only by 1.23% last year, less than one third of the average annual goal of 4%.

Detailed list for Chinese export taxes

Under the approval of the State Council, China will further readjust its import and export tariffs as of January 1st 2008. Detailed list of goods subject to export tax imposition as of Jan 1st 2008 is as under.

2601
Iron ores and concentrates, including roasted iron pyrites

2701
Coal; briquettes, ovolds and similar solid fuels manufactured from coal

2704
Coke and semi-coke of coal, of lignite or of peat, whether or not agglomerated; retort carbon

2706
Tar distilled from coal, from lignite or from peat, and other mineral tars, whether or not dehydrated or partially distilled, including reconstituted tars

7201
Pig iron and spiegelelsen in pigs, blocks or other primary forms

7202
Ferro alloys

7203
Ferrous products obtained by direct reduction of iron ore and other spongy ferrous products, in lumps, pellets or similar forms; iron having a minimum purity by weight of 99.94%, in lumps, pellets or similar forms

7205
Granules and powders, of pig iron, spiegeleisen, iron or steel

7206
Iron and non-alloy steel in ingots or other primary forms (excluding iron of heading 72.03)

7207
Semi finished products of iron or non alloy steel

7208
Flat rolled products of iron or non alloy steel, of a width of 600mm or more, hot rolled, not clad, plated or coated

7211
Flat rolled products of iron or non alloy steel, of a width of less than 600mm, not clad, plated or coated

7212
Flat rolled products of iron or non alloy steel, of a width of less than 600mm, clad, plated or coated

7213
Bars and rods, hot rolled, in irregularly wound coils, of iron and non alloy steel

7214
Other bars and rods of iron or non alloy steel, not further worked than forged, hot rolled, hot drawn or hot extruded, but including those twisted after rolling

7215
Other Bars and rods of iron and non alloy steel

7216
Angles, shapes and sections of iron or non alloy steel

7217
Wire of rod or non alloy steel

7218
Stainless steel in ingots or other primary forms; semi-finished products of stainless steel

7219
Flat rolled products of stainless steel, of a width of 600mm or more

7224
Other alloy steel in ingots or other primary forms; semi finished products of other alloy steel

7225
Flat rolled products of other alloy steel, of a width of 600mm or more

7226
Flat rolled products of other alloy steel, of a width of less than 600mm

7227
Bars and rods, hot rolled, in irregular wound coils, of other alloy steel

7228
Other bars and rods of other alloy steel; angles, shapes and sections, of other alloy steel; hollow drill bars and rods, of alloy or non alloy steel

7305
Other tubes and pipes (for example, welded, riveted or similarly closed), having circular cross sections, the external diameter of which exceeds 406.4mm, of iron or steel

7306
Other tubes, pipes and hollow profiles (for example, open seam or welded, riveted or similarly closed), of iron or steel

Export taxes of other products unmentioned will stay in line with the current level.

Chongqing discovers 100 million tonnes iron ore reserves

Chongqing Municipal Land Resources & the House Administration Bureau announced on December 26th 2007 that Chongqing had discovered the largest iron ore deposit of 100 million tonnes in Wushan.

As per reports, the area of the deposit is 28.75 kilometer and the iron content in an average reaches 42%, exceeding China’s national average level. The perspective reserve is estimated at 300 million tonnes and a conservative estimate can be refined 30 years.

Chonggang plans to set up a processing plant in Wushan on November 28th 2007. Executives from Chonggang disclosed that it will invest CNY 1.4 billion to set up iron ore mining base together with several other enterprises. At present, the iron ore demand of Chonggang is 5 million tonnes per year, when its new plant in Changshou be put into production in 2010, the demand will increase to 9 million to 10 million tonnes per year. At present, nearly 60% iron ore of Chonggang is imported from abroad, after the iron ore plant in Wushan be completed, Chonggang can save nearly CNY 2 billion per year.

China poised to launch steel futures - Report

Insiders in Chinese steel industry said that China is proposed to launch steel futures as soon as possible so as to take the preemptive opportunities as China is the largest producer and consumer of steel materials in the world. The level of marketization is fairly high and prices of steel materials fluctuate frequently in China and it is provided with a favorable foundation in terms of conditions in the market for launching steel futures.

Mr Chang Qing director of futures and financial derivatives research center at China Agricultural University said that "At present, China and its competitors are standing at the same scratch line, who takes the lead to launch steel futures will take the preemptive opportunities in the pursuit for the international pricing right."

At the initial stage for the development of China's futures market, Suzhou Commodities Exchange once took the lead in the world to launch its futures of line materials; then, exchange places like Tianjin, Chongqing and Shanghai launched such a kind of futures contracts in succession. Though all those categories had come to an untimely end midway as restricted by conditions then, much can be used for reference in such aspects as contract design and risk management for the re launching of steel futures.

Since prices of steel materials were firstly let go in the field of products for industrial products in 1993, there has shaped up the foundation for the pricing mechanism in the market. Yet, in the steel and iron industry in China involving a large number of enterprises, traders simply amounted to over 150,000 while there is no uniform national market, traders and circulation procedures are both numerous and the pricing mechanism is far from consummate.

As introduced by China Iron & Steel Association, generally, prices fixed by steel mills will be taken as the norm for prices of steel materials. Such a kind of pricing cannot offer a realistic reflection of supplies and demands in the market but will lead to an excessive gap between prices at home and abroad. At the end of September 2007, the international price index for deformed steel bars was 195.8 points while that in China was only 113.1 points, only 13.1 points up compared to the price level in 1994; yet, the costs for the production of coal, ores, and transportation had surged more than 4 times in terms of prices during the same period of time.

Recently, CISA and SHFE have jointly held a symposium on launching steel futures in the market in Beijing. Personnel in charge from 11 iron and steel enterprises including Baosteel Group, Anshan Iron and Steel Group Corporation, Shougang Group, and Mangang (Group) Holding Co Limited have taken part in the symposium. It was pointed out in the conference symposium that futures market in China had entered into a development stage of standardization. With steel futures launched, enterprises engaged in the production, circulation and consumption of iron and steel materials can make use of mechanisms for price finding and hedge to shape up an open and fair pricing mechanism, evade risks and accelerate the healthy development of steel material market.

WISCO starts construction of high tech garden in Dong Hu

It is reported that the phase 1 of WISCO high tech garden project starts construction in economic development zone in Dong Hu. WISCO expressed that the construction of WISCO high tech garden marks a new step in shaping WISCO high tech industries brand image, building first rate high tech metallurgical industry clusters.

It is noted that in May 2007, WISCO and Wuhan Donghu High Tech Development Zone signed agreement. The first phase project of WISCO high tech garden is the knowledge based economy garden, accounting for 139 acres, the projects mainly include major research centre project, engineering design research project, information automation industry, metallurgy special instruments and RFID project. In accordance with the planning requirements, the second phase manufacturing economy garden is expected to begin in 2008.

Wuhai starts dismantling 4 small steel plants

It is reported that On December 15th 2007, four steel plants were ordered to close by the year end at Wuhai City in Inner Mongolia, suggesting the city having entirely completed tasks of eliminating outdated capacity this year ordered by the autonomous region.

Wuhai City in Inner Mongolia has eliminated cement kilns of 150,000 tonnes and coalmine of 30,000 tonnes in 2007. It shut down two 12,000 KW machines as first phase at Haibo Bay in early 2007, closed 100,000 KW machines as first phase at Haibo Bay each in April and July 2007.

China cuts import tax on oil products for 2008

Chinese ministry of finance said that China will halve its import tax on gasoline, diesel and kerosene to 1% from January 1st 2008 to encourage more overseas buying to meet strong demand. It added that the import duty for fuel oil will be kept at the same rate of 3%. The ministry set the import duty for naphtha at 1% for next year and kept the fuel oil import duty at the same rate of 3%. It also extended a 5% export duty for crude oil.

The oil products tax cuts, last made in November 2006 from previous rates at 5% to 6%, came along with more drastic cuts in metals import duty and increases in export tariffs for steel products, as Beijing sought to reduce its record trade surplus and also to curb energy intensive investment. The cuts on diesel import duty come just days after Beijing decided to waive its 17% value added tax on diesel fuel imports between December and March to help it cope with domestic shortage.

It is certainly favorable for imports. But the final economics will depend on global oil markets, transportation cost versus the controlled domestic market. Chinese state oil firms Sinopec Corporation and PetroChina had shunned imports of the key transportation fuel until November, as the business incurred losses with import costs surging while domestic rates rigidly capped. They finally raised the purchases in the last couple of months to near peak levels after the country suffered through a serious diesel shortage.

Crude export in the January to November 2007 has dropped by 41% YoY to 3.2 million tonnes.

Fiat pulled out of its car JV with Nanjing Automobile

Leading automaker Fiat has confirmed that it is pulling out of its passenger car JV with China’s Nanjing Automobile but said that it would keep cooperating with its Chinese partner in the commercial vehicle and components sectors. Fiat, in a statement, said that it would sell its stake in the venture to NAC.

Mr Yu Jianwei president of Nanjing Automobile said that the two automakers had ended their venture because Nanjing Automobile was merging with top Chinese carmaker SAIC Motor Corporation.

TMK’s Volzhsky new coating plant to start in Q1 of 2008

TMK announced that the new LD smooth internal pipe coating equipment is undergoing testing at its Volzhsky Pipe Plant subsidiary. Commercial production and first shipments should begin in the fist quarter of 2008. The installation of the Bauhuis pipe coating line falls under TMK’s Strategic Investment Program, running up to 2010.

With an annual capacity of 600,000 tonne per annum, this new Bauhuis pipe coating equipment is especially designed for pipes with diameters ranging from 530 mm to 1420mm and wall thickness of up to 42mm.

While at first coating currently stocked pipes, this capacity will later be integrated in a new 508mm to 1420mm longitudinal welded pipe mill with finishing and exterior coating lines. The completion of this new 650,000 tonne per annum mill is planned for the fourth quarter of 2008.

Mr Konstantin Semerikov CEO of TMK said that “This latest range of high quality TMK tubular goods is primarily designed for the construction of state of the art pipelines. The use of the very latest protective coating technology and equipment will enable us to cater to present and future customer demands, particularly from oil and gas companies looking to lower energy costs by improving their pipeline flow dynamics.”

These new TMK pipes with internal smooth coating were developed in cooperation with Gazprom and are a result of the two companies’ joint R&D program. The pipes are currently undergoing the necessary technical and field testing and will later be certified by Gazprom.

Boeing and VSMPO Avisma ink USD 1 billion deal

It is reported that Boeing Co has entered into a USD 1 billion agreement with Russian titanium producer VSMPO-Avisma Corp to source various titanium products from 2011 through 2015. The contract follows a series of agreements between the aircraft builder and the nonferrous producer in recent months.

In the new agreement, it will supply billets, bars, sheets, and plates, raising its standing as Boeing’s largest Russian partner.

Earlier this year, the two firms formed a Russian joint venture, Ural Boeing Manufacturing, which will machine titanium forgings for use in manufacturing the Boeing 787 Dreamliner aircraft. The two have had a series of long term agreements in place since 1997.

Mr Sergey Kravchenko president of Boeing Russia & CIS said “This contract is a serious contribution to development of the large scale program for procurement of Russian titanium to the amount of USD 18 billion from VSMPO-Avisma, our key partner in Russia.”

He added that “Boeing plans investments of USD 27 billion in Russia over the next 30 years. This amount also includes payment for a number of contracts for delivery of products, materials, and services of Russian companies, including cooperation in space industry and engineering works in Boeing Design Center in Moscow.”

VSMPO-Avisma, headquartered at Ekaterinburg in Russia, is the world’s largest producer of titanium metal and titanium mill products.

Zaporozhstal purchases coking coal assets in Russia

Kommersant Ukraine reported that Zaporozhye Metal Integrated Works has purchased the complex of 'Production Association 'Sholokhovskoye' and 'Bystryanskaya 1, 2' mine for the production and concentration of coking coals of the grade.

The purchased complex is capable of concentrating coals of any grades and has the daily capacity of 7,800 tonnes. The complex's resource base is 'Bysrtyanskaya 1, 2' mine with the planned production of 750,000 tonnes of coking coal and the proven reserves of over 46 million tonnes.

Russian HRC and CRC prices may increase in 2008

YIEH reported that Russian domestic flat products price has slightly fallen due to Christmas holidays. The price of hot rolled plate and coil reduced to USD 634 to USD 700 per tonne and cold rolled product also down to USD 712 to USD 778 per tonne.

Market players hope the strong demand can lead the price to soar in January and February next year. In terms of export, the Russia steel market has performed more steadily as compared to last year. They estimate the market will be better even than this year.

It added that base on current market situation, steel products price will continue to rise in January and February 2008.

Severstal to start low rise construction business

FIS reported that Severstal's application on the performance of the third stage of Living Steel Program on the construction of demonstration objects won the contest.

Severstal proposed to focus on low rise construction because the development of this kind of buildup is currently under consideration in Russia and in the Vologda region. On the other hand, in spring Severstal will start the construction of a light steel structure plant, which will become its contribution to the government program affordable and comfortable housing to Russian Citizens and the development of new technologies in civil construction.

The construction of an experimental prototype is scheduled for 2009. The experimental house will have humidity, temperature, energy consumption and other sensors to analyze how the houses behave in certain climatic conditions.

Sredneuralsky Plant violates environmental regulations

It is reported that Sverdlovsk Region Government Environment and Nature Management Committee held a meeting where the attendees looked into how effectively Sredneuralsky Steel Smelting Plant was complying with the plan to cut down on the amount of harmful atmospheric emissions.

The committee reported that even though some efforts have obviously been made, the plant still keeps violating the existing environmental regulations. The plant does not stick to the maximum permissible discharge of sulphur dioxide, ferrous oxide, led and its compounds, copper oxide, sulphuric acid and aluminum oxide. Besides, the enterprise dumps pollutants and manufacturing water and fails to promptly upgrade its vitriolic production facilities.

On the other hand, the company did manage to monitor the quality of air in three automatic monitoring stations and adopted a conservation plant for 2006-2010. Then, the amount of emissions dropped by 2,879 tonnes compared to 2004. One of the plant’s major challenges now is to cut down to the maximum permissible discharge limits in 2008.

Russian PM calls for value added steel production

FIS reported that Mr Viktor Zubkov prime minister of Russia has called the Russian metallurgical sector to switch to the production of high added value products and not just to turn into a pig exporter.

Mr Zubkov said that Russian metallurgists have the means to invest into the purchase of new equipment and technologies and are able to satisfy the domestic demand for stainless steel roll in full.

Severstal increases 9 month dividends

OAO Severstal announced the results of voting on the resolution proposed at the Extraordinary General Meeting held on December 20th 2007

OAO Severstal announced that shareholders in Severstal voted on December 20 to accept an interim dividend of RUB 2.5 rubles a share for January to September 2007.

Severstal in a statement said that shareholders in Severstal accept an interim dividend of RUB 2.5 rubles a share for January to September 2007.

It has paid RUB 12.6 a share for the first quarter and half of 2007. If the nine month dividends are included, shareholders will get RUB 15.1 a share, which is 42.5% more than they received for the whole of 2006.

Severstal paid RUB 10.6 a share for 2006, including interim dividends of RUB 3.6 a share for the first half of 2007 and RUB 2 a share for the first nine months of 2006.

Sever